Download 2013 Conversion Optimization Report

2013 Conversion
Optimization Report
In a digital world where conversion funnel success is directly impacted by competitors, we cannot afford
to be without competitive intelligence. Yet this Compete/Millward Brown Digital research shows that
the majority of marketers are flying blind in this regard. They do not understand the conversion funnel
dynamics for their industry or competitors. Many marketers believe their conversion rates are average,
when in fact they are below average. This research also shows that taking the time to understand these
dynamics pays dividends. By reading this research report, you can learn valuable lessons that you can use
when optimizing your online conversions.
Survey respondents were presented with questions such as:
• What are you doing now to optimize conversion?
• What are the results of your efforts?
• What tools and tactics do you expect to increase allocated resources (time and money) to improve
performance?
It’s important to remember that conversion rates vary depending on many factors. Industry, price, and
seasonality are just a few examples. In this report, we present cross-industry averages intended to provide
high-level correlations and identify universal success factors.
More than 41% of respondents identified as Director-level or above in their organization and nearly all are
responsible for some type of conversion activity on a website, with traditional e-commerce sales leading all
other conversion types (81%).
Most popular website conversion activities
81%
Ecommerce Sales
58%
Sign-ups/Registrations/Reservations
Page views to certain website areas
50%
Information Requests
41%
32%
Video Views
Downloads
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18%
The state of conversion optimization
There is no shortage of tools available to marketers aimed at improving conversion performance. Survey
results show that marketers are utilizing a variety of tools and techniques, new and old, to get more return
on their incoming website traffic. Of the tools tested, 27% of respondents are using more than four unique
tactics and most heavily rely on promotions to boost conversion rates (66%). While promotions may be the
most common and reliable tactic used to increase conversion rates, it comes with a direct cost to each sale,
making it a less sustainable and ultimately less cost-effective approach than others. The survey results make
it clear that marketers employing multiple optimization tactics achieve higher overall conversion rates – 85%
of those with greater than 2% conversion rates.
Most popular optimization tactics
66%
Promotions
49%
A/B Testing
44%
Product Recomendations
42%
Personalization
40%
Re-Targeting
36%
Copy Testing
Responsive Design
Competitive Intelligence
34%
28%
Despite the amount of software available and awareness of testing as a proven optimization tactic, it is
surprising to find that only 49% of marketers are currently A/B testing content on their websites and an even
smaller segment of marketers (36%) are copy testing specifically.
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So what is a good conversion rate?
The definition of a “good conversion rate” varies depending on many factors. The following are cross-industry
averages intended to provide high-level correlations and identify universal success factors.
There is little to no correlation between number of
steps in a funnel and conversion rate.
Survey results show the median conversion rate to be 2%, with 14% having the lowest rate (less than 0.5%)
and just 4% converting 10% or more of their traffic. Interestingly, the length of the conversion funnel has little
impact on its success. The average number of steps in respondents’ conversion funnels (for unregistered
users) is 3.1. Those with shorter conversion funnels did not indicate higher rates of conversion. The most
successful conversion funnels tend to be a result of the entire user experience, from design to effective callsto-action, auto-fill forms to ease-of-use.
CONVERSION RATE
# STEPS
IN FUNNEL
UNDER 2%
2% AND OVER
1-2
48%
52%
3
53%
47%
4-5
50%
50%
Not surprisingly, organizations with higher conversion rates have higher annual sales. In fact, 71% of those
with $25M in annual sales have above median conversion rates versus just 37% of those with less than $25M
in annual sales.
Perception vs. reality
When asked how their average website conversion rates compare to their competition, 22% of respondents
believe their conversion rates to be higher than their competitors while 27% believe them to be lower.
When combined with reported average conversion rates, perception of competitive performance reveals a
gap that marketers likely do not know exists. Poorer performers – those with conversion rates below 0.5% –
comprised 14% of the respondents, yet only 7% believe that their conversion rates are below average. This
difference suggests that while respondents are not overly optimistic – believing their rates are best-in-class –
they also don’t believe they’re trailing the competition when it’s likely that they are indeed.
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A similar gap occurs with top performers. While 12% of respondents have a conversion rate greater than 5%,
only 5% believe theirs to be significantly higher than average.
70% of marketers are not aware of their competitors’
conversion rates, nor the average of their industry.
Benchmarking the performance of your conversion funnels vs. those of your competition fills this knowledge
gap, allowing marketers to identify and learn from best-in-class performers, isolate key issues that may be
impacting their own performance, and in the case of those that are best-in-class, manage resources more
effectively to continue growing (e.g. redistribute budget to traffic generating activities from development
resources). However, fewer than 30% of marketers are currently benchmarking their conversion rates against
those of their competitors and industry as a whole, leaving 70% of marketers in the dark.
Investing in optimization yields results
Marketers are spending a fair amount of their time conversion optimization. Nearly 1 in 4 indicated that they
spend more than 25% of their time specifically on optimizing sales flows. More importantly, this investment
of time results in better performance. 58% of those investing less than 10% of their time have poorer
performing funnels (less than 2% conversion rate); whereas those that are spending 10% - 25% of their time
on optimization are more likely to have a higher conversion rate (60%).
Investing more time and money in conversion
optimization results in higher conversion rates.
Optimization has not grabbed a strong share of budget, however. 20% of respondents allocate less than 1%
of their marketing budget to optimization, while 61% invest less than 5%. Like the time investment correlation,
those that are spending more on optimization are getting results. 62% of high investors (more than 5% of
budget) have conversion rates over 2% vs. 48% of low investors (less than 5% of budget).
The future of conversion optimization
Investment of both time and budget in optimization may be on the upswing as marketers acknowledge the
challenge ahead of them. Just 20% responded that they have all or most of the information they need to make
optimization decisions. Again, like the investment of time and money, those that have more of the information
they need have higher conversion rates.
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One indicator of continuing increased investment is that those investing more now are equally as likely
to need more information and resources to make optimization changes. 83% of those investing more in
optimization still need more information and resources. This may be due to the fact that they have learned
what needs to be done and now need assign resources for development.
CONVERSION RATE
FACTORS DRIVING CONVERSION
OPTIMIZATION DECISIONS
UNDER 2%
2% AND OVER
Need more resources and information to make
conversion optimization decisions
55%
45%
Have most or all of the resources and info
32%
68%
A second indicator of increased investment is that most marketers are optimistic about their budgets in the
coming 12 months. Investment in all of the survey’s suggested optimization tactics is expected to increase.
Leading the way are investments in customer analytics, personalization and social media analytics, while
mobile-specific optimization, SEO and competitive analytics are the leading tactics to secure first-time
investment in the coming 12 months.
1st Time Investment
Increase
No Change
Decrease
No Plans to Invest
Mobile-specific optimization
Outbound digital marketing
Inbound (content) marketing
A/B testing
Customer analytics
Competitive analytics
Social media
Search engine optimization
Personalization
Re-targeting
0
5
20%
40%
60%
80%
100%
Key takeaways
Thank you for reading the 2013 Conversion Optimization Report, designed to provide a snapshot of digital
marketers’ approach to conversion optimization in 2013 and help you understand cross-industry conversion
benchmarks, what tactics and tools drive conversion optimization success, high-level correlations and
universal success factors. Here are the key takeaways:
•
•
•
•
•
•
Conversion rates differ from industry to industry, season to season, and more.
Promotions effectively increase conversions, but at a cost.
There is little to no correlation between number of steps in a funnel and conversion rate.
There is a direct correlation between higher conversion rates and higher annual sales.
Many marketers believe their conversion rates are average, when in fact they are below average.
70% of marketers are not aware of their competitors’ conversion rates, nor the average of their
industry.
• Investing more time and money in conversion optimization results in higher conversion rates.
• Investment in all of the survey’s suggested optimization tactics is expected to increase in next 12
months.
Check out these other Compete/Millward Brown Digital reports…
3 Steps to Optimize Your Online Conversion Funnel
Considering how essential ecommerce has become in nearly every major industry,
maximizing the effectiveness of your online conversion funnel is no longer ancillary;
it must be a primary concern for your business. This report will demonstrate how you
can leverage competitive intelligence to optimize your sales funnel and achieve your
conversion goals. Download Now
3 Best Practices for Optimizing Your Ecommerce Strategy
Electronic commerce (ecommerce) is a rapidly growing business as an ever- increasing
number of digitally savvy consumers spend more of their time and money online. This
report will demonstrate how you can leverage competitive intelligence to launch or
improve your ecommerce strategy. Download Now
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Proven
Strategies for
Digital Marketing
Optimization
With a foreword by Eric Morrow, author
of Digital Marketing for Everyone
4 Proven Strategies for Digital Marketing Optimization
The key to any effective digital marketing strategy is having a thorough understanding
of your potential customers’ paths to purchase and optimizing your marketing channels
to maximize your ROI. This ebook focuses on four crucial areas of digital marketing
and gives you the knowledge and tools you’ll need to support you on your journey to
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Online Conversion Insights™
Benchmark and optimize your online conversion funnel
Online Conversion Insights is a Compete product that dives deep
into the performance of your competitors’ websites and reveals
what actions customers took on competitive sites (e.g. they bought
something, filled out an information request, made a reservation,
started a trial, looked for a retail store location) and sharpens the view
into site traffic by looking at loyalty (New vs. Returning visitors) and
competitive cross-shopping during a given month.
Key Benefits
• Understand online funnel performance across a set of competitors to optimize your own conversion
rates.
• Benchmark and analyze key business performance indicators such as:
»» Sales, orders, reservations, trials or other conversion actions
»» New vs.returning traffic
»» Cross-shopping (traffic that is shared across competitors in month)
»» Page and website category level traffic details
»» Store Locator Use
»» Weekly Ad/Specials traffic
»» Product /Service level traffic
»» …or any other page level traffic details
LEARN MORE
About Millward Brown Digital
About Millward Brown Digital: In the U.S., Millward Brown Digital delivers comprehensive digital solutions
to help advertisers, agencies and publishers increase marketing effectiveness and drive brand growth.
The unit combines Compete’s consumer, channel and market intelligence solutions — supported by the
largest behavioral panel in the industry — with Dynamic Logic’s market-leading advertising and campaign
effectiveness offering. Insights from the division helps marketers increase media efficiency and optimize
campaign effectiveness; expand sales and market share for their brands across all channels and enhance
total brand performance.
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